Social Insurance in Service to Economic Mobility

Mar 29, 2017 / Michael Natalie, Horsesmouth Associate Editor

In a critique of Representative Ryan’s recent remarks on the American Healthcare Act, Forbes contributer Robert Hockett appeals to history to discuss the merits of social insurance programs like the Affordable Care Act and Social Security.

Hockett attributes the resurgence of Germany’s economy following World War II to the social insurance programs first implemented by Otto von Bismarck a century prior. Bismarck, no liberal or idealist, implemented social insurance programs out of stone-cold pragmatism—he knew a fearful, uninsured populace would weigh down the nation’s economy.

By shifting the fiscal burden of insurance from the individual to the collective, Hockett argues, we free those who would otherwise behave very conservatively—thus acting as economic dead weight—to pursue riskier but more economically healthy ventures. For example, someone who would ordinarily funnel their income into a health savings account might instead invest the money or start a new business.

Visit Forbes for Hockett’s complete remarks on the subject.

 

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